Makin' Money
Spare a dime? Or $900 billion?
$900,000,000,000.
That’s the total — so far — of government bailout money this year. Reuters has the rundown, which includes:
$200b for F. Mac n’ Mae
$85b for AIG
$300b for the FHA to refinance bad mortgages
$116b to JP Morgan for both the Bear Stearns buyout and to help bolster trades after the Lehman bankruptcy
$200b in Fed loans to banks, and oh yeah…
$4b to help cities with blight caused by foreclosed homes
Whoah. I hope you’ve been tuning in to Marketplace and the Morning Report this week for some excellent coverage of how this is all coming down and what it means. Meanwhile for this weekend we’re still planning an in-depth look at how your finances and investments are affected by these moves on Wall Street and in Washington.
In addition to what I noted in my previous post, we’ll be talking about recent developments in money market mutual funds — usually referred to as “as good as cash.” Not so much? One of the biggest funds, Primary Fund, announced this week that it’s “broken the buck,” meaning the value of a share is now less than a dollar. Yes, this is just one fund company. But we’ll ask our New York bureau chief Amy Scott about what that means for your investments.
We’re still getting lots of letters about Lehman, Merrill and AIG, and I’ll reiterate that we’re doing two special segments of Getting Personal where Chris will answer as many of those questions as we can. Keep them coming… and tell us here what else you want to know about this week’s developments. Stay cool… the FDIC will cover your bank deposits, the SIPC will cover your investments, and Uncle Sam is now in charge of your insurance annuities and coverage at AIG. So far, so… ok…
- September 17, 2008
- 4 comments
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Latest Comments
- And if you threw it all a-way (10)
- Al wrote: I just heard a playdoyer on PBS for the "American" way of na... [read]
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- Spare a dime? Or $900 billion? (4)
- Jay wrote: And now they want to add $700 billion to the total? <a hre... [read]
- Tom Woodall wrote: On today's show (Sept. 20) you asked your colleague why Lehm... [read]
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Comments (4)
I'm curious -- just for comparison's sake, how much has the Iraq war cost to date?
Hmm -- I may have just answered my own question. According to this site:
http://zfacts.com/p/364.html
the cost is still approaching $600 billion, which means that Washington has spent more money this year bailing out Wall Street than they have on the entire war to date.
And to think there was a day when the Republicans stood for fiscal conservancy!
Ok, that adds up to 905 billion, but you didn't include the cost of making good any money market defaults. Anyone know what this would come to?
And now they want to add $700 billion to the total?
http://www.nytimes.com/aponline/business/AP-Financial-Meltdown.html?partner=rssyahoo&emc=rss
Where is all this money going to come from, exactly?
Actually, I know the answer to that one, too -- our children and their children.
Sigh.
On today's show (Sept. 20) you asked your colleague why Lehman had not bothered to take money from the Fed in its hour of crisis. (Your colleague obviously didn't know the answer.) The reason is that Lehman needed cash that could go on the assets side of the ledger--not more borrowed cash. It could have obtained such cash only by selling assets or new stock. When its talks with other banks to inject cash (in return for assets or stock) failed, it was out of options.